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5/13/2004

Network has plenty of horses in the barn

By Warren Berry
Newsday

Who needs Howard Stern flapping his mouth when you can make just as much money baring Britney Spears’ navel or Bette Midler’s tonsils or Donald Trump’s brainstorms?

If you broke down the business plan at Clear Channel Communications, those are the kinds of faces you’d see on the pie chart.

It must be comforting to be a communications company so well-off that you don’t break a sweat as you order your radio stations to drop morning drive time’s No. 1 “shock jock.”

It’s quite a contrast with other companies such as Martha Stewart Omnimedia or even Warren Buffett’s Berkshire-Hathaway, where a single person conceivably could determine an entire company’s future. At Clear Channel, when things get dicey with one prima donna, there’s always an 8-by-10 glossy of another potential moneymaker on the corkboard.

Clear Channel may be best and most controversially known for being the nation’s dominant radio company, but it also happens to be one of the world’s largest promoters of live entertainment and is the owner-operator of more concert venues than practically anyone around the globe.

Fresh from triumphs with Britney and Bette, it trots out an ageless Madonna and such perennials as David Bowie and KISS, heavy metalers who have just a coating of rust. On radio, some critics contend, the programming is too predictable, yet the national offerings do run the gamut from the Rev. Jesse Jackson to The Donald, who during the next season of “The Apprentice” will tell us all the next day why he canned contestants. (This could be one of the few times when a radio show was inspired by TV rather than the other way around.)

Last week the company revealed a 64 percent surge in first-quarter earnings to $116.5 million, aided by the $47-million sale of its stake in Univision, the Latin-American network. But even as it predicted further “double-digit” gains for the full year, the company said longtime CEO Lowry Mays had undergone brain surgery April 30 after feeling numbness on his left side. By last Thursday, though, his son Mark Mays, Clear Channel’s president and chief operating officer, reported that “the surgery was successful and Lowry is in good spirits and mentally alert.”

Lowry Mays is the driving force in the expansion of Clear Channel, which acquired nearly 1,200 stations after the Telecommunications Act of 1996 ended the 40-station ownership cap. (It isn’t going unchallenged. In August, a lawsuit by a rival Denver promoter — Nobody In Particular Presents — is to go to trial, charging that Clear Channel used its dominance to block publicity of competitors’ events.)

The stock is at around $41 a share, midway between its high and low for the past 52 weeks.

The company reported that a slight improvement in advertising boosted the radio division’s revenues 5 percent to $833 million. But thanks to the likes of Bette and Britney, the entertainment division’s sales jumped 17 percent to $514 million.